Government needs to ensure that public resources are being used in the most effective way possible. The methodology for achieving this is set out in the Government's (revised) Green Book1.
If a Local Authority is procuring a waste facility, it will need to demonstrate not only that the method of procurement means that the project is affordable, but also that it represents value for money (VfM). In the Outline Business Case (OBC) Local Authorities are required to show the extent to which PFI procurement is expected to deliver VfM.
Value for money is assessed from both a quantitative and qualitative perspective. The methodology is detailed in the new Value for Money Guidance which was published by HM Treasury (HMT) in August 20042.
Further to the release by HMT of the new Value for Money Assessment Guidance (the Mandatory Guidance), DEFRA commissioned Partnerships UK (PUK) to produce a waste specific value for money (VfM) assessment guide.
This waste specific guide is intended to complement, rather than replace, the Mandatory Guidance and assist:-
1. Local Authorities with determining whether PFI procurement is likely to deliver VfM for a specific waste project (Stage 2 Assessment); and
2. DEFRA with determining whether PFI procurement is likely to deliver VfM for waste projects at the programme level (Stage 1 Assessment).
The document assumes familiarity with the Mandatory Guidance and provides clarification in the following areas:-
1. how to determine appropriate waste model inputs for the quantitative assessment;
2. how to interpret the model outputs for the quantitative assessment;
3. which waste specific factors should be considered under the qualitative assessment.
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1 Published in January 2003 and available from the following website: .
2 Programme and project VfM assessment using the new guidance became mandatory in January 2005.